Formation of Limited Liability Partnership:
Limited Liability Partnership (LLP) is the another made of doing in business in India. The concept of LLP has been recently introduced under Limited Liability Partnership Act, 2008. LLP is a business vehicle alternate to the companies under Companies Act, 2013. LLP provides the benefit of Limited Liability and also provides the flexibility of organizing their internal matters. LLP mode of business is particularly beneficials to the small entrepreneurs and entrepreneurs in the small industry and is conducive for the investments by Venture Capital Companies. Unless the normal partnership firm LLP can carry out every trade, profession, service or occupation.
LLP is a body corporate formed under LLP Act, 2008 and is an entity distinct from its partners and is perpetual succession
The Salient Features of LLP are as under: –
- LLP shall be a body corporate and a legal entity separate from its partners.
- Any individual or a body corporate can be a partner in an LLP.
- LLP will have perpetual succession.
- It will provide flexibility to devise the agreement as per their choice.
- LLP is a separate legal entity, liable to the full extent of its assets, however, liability of partners is limited to their agreed contribution in the LLP which may be tangible or intangible in the nature.
- No partner would be liable on account of the independent or unauthorized actions of other partners or for their misconduct.
- Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India.
- There is no restriction on the maximum number of partners in a LLP.
- The LLP shall be taxed under the Income – tax Act, 1961 as of partnership firm.
- The Indian Partnership Act, 1932 is not be applicable to LLP s
- The Investment by the Foreign Investors / Company in the LLP can be on Repatriation basis or on non-repatriation basis.
- The Investment by the Foreign Investors / Company in the LLP can be subject to Sectoral Caps stipulated in FDI Policy. The FDI is permitted under Automatic Route or with GOI permission as per FDI Policy.